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$39M Penny-Stock Scam Lands 8 Behind Bars
Eight individuals, including Zirk de Maison, were sentenced to prison for their roles in a massive penny-stock fraud scheme that swindled investors out of $39 million, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
Zirk de Maison, of Redlands, California, was hit with a 12-year prison sentence and ordered to pay $39.1 million in restitution. Stephen Wilshinsky, of Woodland Hills, California, received nearly three years in prison and $4.2 million in restitution. Talman Harris, of Monroe, Connecticut, was sentenced to more than five years in prison and $843,423 in restitution after a jury convicted him on all counts following a three-week trial.
Gregory Goldstein, of Stevenson Ranch, California, was sentenced to nearly three years in prison and $6.3 million in restitution. Jack Tagliafero, of Glen Cove, New York, received more than five years in prison and more than $5 million in restitution. Victor Alfaya, of Port Washington, New York, was sentenced to nearly two years in prison and $3.6 million in restitution. Kieran Kuhn, of Port Washington, New York, received nearly four years in prison and $5.6 million in restitution. William Scholander, of Queens, New York, was sentenced to nearly two years in prison and $843,423 in restitution.
The defendants conspired to defraud investors by issuing millions of shares to themselves at little or no cost and artificially controlling the price and volume of traded shares. Little or no portion of the investments went to fund the operations of the manipulated companies, with de Maison and his co-conspirators using most of the investments to enrich themselves.
Many of the defendants were brokers and former brokers who abused their client relationships to solicit and induce investors to purchase de Maison’s stock in the manipulated companies at artificially inflated values. In exchange, de Maison paid the brokers and former brokers enormous, illegal kickbacks, often as large as 50% of the investment, which were never disclosed to the client-investors.
The scheme involved several public issuers, including Kensington Leasing, Ltd., Lenco Mobile, Casablanca Mining, Ltd., Lustros, Inc., and Gepco Ltd. Two additional co-conspirators have their sentencings scheduled for February and July 2017.
Key Facts
- State: Ohio
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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